Helping Make our Communities Safer. Jaime is a Trial Attorney and Safety Advocate at Atlee Hall, LLP in Lancaster, PA representing seriously injured victims, wrongful death and those harmed by unsafe products and corporate neglect. Contact Jaime at 800-924-2309 or email jdjackson@atleehall.com.

Friday, December 11, 2015

VW says emissions
cheating began in 2005.

Coverage
of the Volkswagen emissions scandal continues, with news of Volkswagen’s
supervisory board chairman Hans-Dieter Pötsch’s revelations about the company’s
internal investigation receiving significant coverage. In a lengthy article,
the New York Times (12/11, Ewing, Subscription
Publication, 11.64M) reports that Pötsch acknowledged Thursday that the
decision to cheat on emissions tests began in 2005 because the company’s
ambitions in the US conflicted with air quality rules that were more stringent
than Europe’s. VW opted to install a technology called lean NOX traps over a
more expensive technology called selective catalytic reduction (SCR), and even
“sidelined” some of its executives who had argued for SCR. However, the lean
NOX traps were less reliable at controlling emissions, so engineers introduced
software that would lower emissions during testing after realizing that the
diesel vehicles could not meet US standards. Pötsch said, “It proves not to
have been a one-time error, but rather a chain of errors that were allowed to
happen.” The Wall Street Journal (12/11, Boston, Varnholt,
Sloat, Subscription Publication, 6.23M) reports that Pötsch added that the
investigation showed the need for change in testing procedures in the engine
development department, which allowed individuals who designed the procedures
to sign off on the results without a second opinion. Despite Thursday’s
admission, the Journal says VW failed to answer who ordered the software to be
installed, when the order was made, and who was behind the long term cover-up.
The company believes only a select few carried out the deception, and said that
nine managers have been suspended in relation to the fraud, though it remains
unclear whether they were actually involved in the wrongdoing. Fortune (12/10, 4.24M) contributor Geoffrey
Smith similarly argues that the news conference was “a near-complete
anti-climax” in which executives provided very little information and “refused
to discuss who was responsible for hiding the true level of harmful emissions.”

Washington (DC) Post (12/10, Rising, Sopke,
7.78M) adds that Pötsch also “did not say if any VW models from before 2009 had
the cheating software in the United States,” nor would the EPA “comment on
whether any more model years are under investigation.” Pötsch also reiterated
that the investigation, which has “so far analyzed data from laptops, phones
and other devices from 400 employees,” is ongoing but has so far turned up “no
indications that board members were directly involved.” According to Reuters (12/10, Cremer, Prodhan, Potter), the
company will work to improve oversight of software development in light of the
findings and hopes to reach an agreement soon with US environmental regulators to
begin recalling affected vehicles there. USA Today (12/10, Bomey, 5.56M) reports that
Pötsch pledged that the company will partner with independent auditors for
emissions certification in the future and create a new committee that will
approve new emissions software. The AP (12/10), Ars Technica (12/10, Gitlin, 1.15M), Bloomberg News (12/10, Rauwald, 3.4M), the Los Angeles (CA) Times (12/10, Hirsch,
Masunaga, 3.6M), and MarketWatch (12/10, Boston, 758K) offer
similar coverage of Pötsch’s comments, while CNBC (12/10, 2.08M) and Reuters (12/10) provide video of the press
conference.

Jalopnik (12/10, 627K) contributor Jason
Torchinsky asserts that the company is “enduring this colossal failure because
its culture didn’t let employees fail enough before,” prompting them to fudge
solutions when they were “unable meet the U.S. tough diesel emissions
requirements.” Torchinsky condemns the “idea of not being ‘allowed’ to make
mistakes” in corporate settings as “absurd” and criticizes VW for not embracing
failure as opportunities to learn.

VW CEO: No reason to sell assets. Bloomberg Business (12/10, Nichols, Rauwald,
Reiter, 3.4M) reports that VW CEO Matthias Mueller said, “in his first
television interview since the scandal broke in late September,” that the
company has “no reason whatsoever to get rid of these assets” – referring to
the company’s twelve brands – in the wake of the scandal. According to
Bloomberg, Mueller’s comments suggest that the company “has the financial means
to pull itself out” of the scandal without selling off assets. In Europe, the
company is likely to face “6.7 billion euros in diesel recall costs,” plus “regulatory
fines and potential damages from hundreds of lawsuits,” in addition to “as much
as $9.4 billion” in recall costs in the US, according to Bloomberg
Intelligence. Meuller also told CNBC (12/10, 2.08M) that the company is not
prepared to reduce prices and discussed how the company intends to rebuild lost
trust with customers. To that end, according to NPR (12/10, Ydstie, Greene, 1.78M), officials
said the company plans to compensate vehicle owners for the lost resale value
of the cars but declined to elaborate further. In a column for Bloomberg Business (12/10, 3.4M), Chris Bryant
speculates about whether the company has surmounted the highest hurdles in the
scandal, concluding that the company appears confident and “has resources to
call on before bond investors would face any pain.”

Consumer attorneys nominate Ken Feinberg as settlement master in
VW suits. Bloomberg Business (12/10, Fisk, 3.4M) reports
that Kenneth Feinberg, who “handled General Motors Co.’ ignition switch fund”
and “compensation for victims of the Sept. 11, 2001 terrorist attacks and BP
Plc’s 2010 Gulf of Mexico spill,” has been nominated as a special settlement
master in the federal consumer lawsuits against VW after U.S. District Judge
Charles Breyer requested suggestions for names on Wednesday. The request
doesn’t necessarily mean that the case will be settled but is “likely a
recognition that an experienced neutral should be able to facilitate a fair and
just resolution of the claims whether that is early or at a more advanced stage
of the litigation,” according to Blair Nicholas, a lawyer for the plaintiffs.